Letter No.107
13 September, 1999

10 August 1999

Job loss announcements in British manufacturing will total at least 160,000 during the next 18 months and will cause a huge migration from the north to the south of England, according to the National Institute for Economic and Social Research. The institute says that many of the food, textiles and tobacco industries redundancies will be permanent, and predicts that British manufacturing in the future will revolve around chemicals, pharmaceuticals and engineering.

IBM in NZ will drop as many as 200 staff as the company stops work on the police Incis and two other projects. IBM employs about 1,000 people in NZ.

11 August 1999

A Treasury paper released to the NZ Herald warned government early this year that its $600m cap on new spending will not be enough to maintain current levels of education, health, welfare and retirement services. The paper names three `levers' through which government could reduce spending: cutting eligibility, reducing the level of entitlements and targeting.

12 August 1999

The government's announced withdrawal of funding for community welfare support umbrella organisations is reversed. The Federation of Voluntary Welfare Organisations, the Council of Christian Social Services and the Council of Social Services will now be funded to a total of $138,000This is a drop of $10,000 but not the drastic slashing that was announced earlier this year.

Social Services Minister Roger Sowry says the new funding arrangement removes duplication of services among the three umbrella organisations. But spokesperson for the groups, Tina Reid, points out that under the new contract-for-services framework there is no provision for the roles of research and advocacy which the organisations previously provided.

The National Business Review looks at where new jobs have come from during the last 15 years and what jobs have disappeared over the same period. The greatest increase in jobs has been in the services sectors, retail and wholesale trading. Declines in the number of people working have occurred in all sectors of primary production.

The meat industry continues to restructure with two South Island Alliance Groups plants merging. Chairman John Turner says the new plant will employ 2,000 and the merger will result in no more than 30 redundancies, all in management or administration. Only one of NZ's four large meat companies, PPCS, has not merged plants. PPCS is expected in make an announcement in this regard in a few weeks.

Palmerston North City Council sets up a fund to support groups that have programmes to move people towards real jobs. PN community development planner Dennis Morgan says that the $80,000 fund is intended to work as an incentive for groups to become further involved in job creation.

NZ's restrictive laws are having dampening effects on credit unions according to visiting World Council of Credit Unions president Dennis Cutter. He notes that NZ law forbids businesses from using credit unions, limits individuals to deposits of no more than $40,000, and credit unions are required to post a $15m fee to join the banking clearance system. These restrictions, Cutter says, help account for why only 7% of the NZ workforce are members of credit unions. In Australia nearly one third of workers, and in the US half the workers belong to credit unions.

16 August 1999

Party leader Jim Anderton announces the Alliance's economic growth policies and a target of creating 76,000 new jobs over the next three years. The strategy would see the return of an employment portfolio to cabinet through a new Economic Development and Employment Ministry and Anderton wants to be the minister. The Alliance would see a network of regional development agencies and a $200m Economic Development Fund to provide support for new technology industries that have the potential to provide the country with export income and provide people with sustainable, skilled, well paid jobs.

The policy sees public investment in job opportunities, education and infrastructure, science and technology combined with private sector investment in technology. Tax incentives for research and development and for science based industries are part of the programme. Anderton says they have drawn the policies from successful models in Scotland, Taiwan, Switzerland and Finland. Anderton: "We should replace the passive free market approach with a positive economic development policy in which our educational, scientific and business skills are combined in a regionally-based, strategic economic development programme." The Alliance policy paper is titled `Partnership 2000, A Springboard for Growth'.

A report on long term trends in Auckland, written to help the city's council review its planning, tells the council to expect the city's unemployment rate to rise above 10%. `Auckland Foresight' also predicts that secure residential enclaves will be built to house the wealthy as inequality leads to conflicts between the haves and have-nots.

The Ministry of Education is working with schools to help them prepare for the extra 6,000 students that will be starting secondary school next year. Existing teacher shortages will be exacerbated and the ministry has begun offering scholarships for people to train to teach maths, science, technology, computing and te reo Maori. The ministry is also recruiting teachers in Britain, Australia and Canada. The ministry expects an increase of 6,000 secondary students each year for the next six years.

17 August 1999

The government unveils its economic development strategy policy that focuses on incentives to students. The `Bright Future' policy would direct $12m of new spending on knowledge based programmes ranging from $500 cash incentives for top secondary school students to continue to take science and maths at university to $40,000 scholarships for doctoral students.

18 August 1999

Professors and teachers criticise National's knowledge-based economy policy by saying NZ does not the infrastructure in place for the incentives to be effective. Bio-engineering research professor Peter Hunter says that while scholarships will be helpful, he contrasts the NZ academic/research model with the commercial research centres embedded in the universities model that works so effectively overseas. Senior science lecturer at the Auckland College of Education, Denis Burchill, adds that high quality secondary school science teachers are in too short supply. He says that having good staff in that area, not nerds, would do much to encourage students to take up science.

19 August 1999

Months after announcing the restructuring of the National Library, Chief executive Christopher Blake tells staff that a total of 30 to 35 full and part-time positions would go altogether. However, 84 positions are being disestablished and as many as 37 new positions created which will see some staff leaving and new staff with different skills being taken on.

20 August 1999

The Department of Internal Affairs is criticised by the parliamentary internal affairs committee about its $1.75m in-house training. Committee members Peter Dunne and Trevour Mallard label the programme lavish and unsuccessful. The committee found low levels of morale and high staff turnover in the department and that the "focused-change" training and restructuring programme created tremendous cynicism among staff. Committee member Grant Gillon says that while the restructuring may have saved money it has not produced tangible results for the taxpayer.

22 August 1999

Wellington's former Mature Employment Centre is reforming itself into the Nework Centre. Co-ordinator Linda Hobman says the centre is to provide a network, and other services, for people of all ages who are working in a `portfolio" way. Nework Centre offers regular workshops on "Your new livelihood" and "Making a living as a freelancer".

23 August 1999

Child health in South Auckland is deteriorating according to a report for Counties Manakau Health Council. The document highlights the high rate of cot death, lack of immunisation and dropping nutrition levels in South Auckland. CMHC chair Len Brown says the causes are socio-economic. He says people are living in damp, over-crowded houses and they lack of accessibility to health services. He says these conditions are the breeding ground for meningitis, measles, whooping cough and bronchial infections and other infectious diseases especially among Pacific Island families.

24 August 1999

Palmerston North City Council votes to lobby government over concerns it has with the treatment of local people by Winz. The council had asked people for feedback on their experience with Winz. Mayor Jill White says about 140 people responded, most saying they felt shame, humiliation and fear when dealing with Winz case managers. White says government should know if Winz is not carrying out policy in a fair and just way. She also says government should be told it is setting benefits too low.

One-third to one-half of the people referred by Winz to the Wellington Downtown Ministry for foodbank parcels are not being given the benefits they are entitled to according to Downtown Ministry director Kevin Hackwell. He claims that Winz encourages its staff not to approve benefits by offering them bonuses for reducing paperwork.

Deutsch Bank is predicting the NZ unemployment rate to be about 6% during the next two years and that economic growth should be 3.3% to March 2000 and 4% the year after. Deutsch Bank expects the Reserve Bank to begin lifting interest rates to 9% within two years in order to hold inflation down.

However, inflationary pressure will not be from rising wages, according the Bank of New Zealand. Peter Jolly of the BNZ says wage are not rising as fast as inflation and could not be used as a justification to raise interest rates. Jolly says the labour market is flat and that the recent 0.2% drop in unemployment was not due to more jobs but to people leaving the labour market.

Urban Maori activist and Labour candidate John Tamihere says the lack of qualifications and jobs is goading Maori men to violence. Tamihere says a solid urban Maori infrastructure based around education, sports and zero tolerance to violence will help create more healthy families and productive, employable Maori men.

West Coast rain forest logging of native beech trees gets the go ahead from government. The scheme has been promoted by State Owned Enterprise Timberland West Coast as "sustainable" and a job spinner for the area. But minister for the SOE, Tony Ryall, gives no assurances that new jobs would be created on the coast as a result of this lift on banning the logging of native trees.

25 August 1999

Contact Energy is shedding 57 staff. The redundancies are in Auckland and Dunedin and are mainly people working in the telephone call centres and support staff work who worked for the ten electricity and gas companies Contact Energy bought up last year. The company is aiming at having a total of 155 employees. Its call centres are in Levin and Dunedin.

26 August 1999

Garment manufacturer Soma President announces 25 staff are to go as the Hastings company loses contracts for two American T-shirt and underwear brands. Another Hawke's Bay company announces 40 redundancies as leather processor Richina Pacific plans to close one of its two Napier factories.

27 August 1999

The Alliance reiterates its call for a replacement of GST with a financial transactions tax. Jim Anderton says FTT is much fairer than GST because it shifts the tax burden from those who spend every dollar they earn every week to those whose commodity is money.

The government and new political party Mauri Pacific, which has five sitting MPs, strike a deal that would see the government provide an extra $15m for Maori initiatives in return for Mauri Pacific's support for another round of tax cuts in April.

28 August 1999

The Alliance will not push for increasing benefit levels according to spokesperson Grant Gillon. He says his party's last election pledge of raising benefits to pre-1991 levels was based on the large government surpluses that are no longer available.

29 August 1999

Any tax cut proposal by the government before the election is unlikely to be passed through parliament as Auckland mayor and Epson MP Christine Fletcher says she would cross the floor to vote against it. MP Tuariki Delamere has also said he would not support another tax cut at this time.

Low-income earners tend to pay extra for their banking services according to the Federation of Family Budgeting Services. Some bank customers with low or negative balances pay as much as $30 per month in bank fees.

After Hamilton City Council staff call police because a distressed man demanded to see the mayor, mayor Russ Rimmington says the city's social problems have reached crisis point.

Karen Morrison-Hume, head of the Hamilton Anglican Social Services says there has been an alarming escalation in social service need during the last two years. She blames government policies and static or reduced funding to agencies at a time more and more people need their services. Morrison-Hume says her agency saw 1,033 people last year, most of them struggling with desperate poverty. The agency's 24-bed housing facility for men recently out of prison or psychiatric facilities is permanently full. Last year 600 families per month received food parcels from Hamilton food banks. She says unaffordable rents are the single biggest factor in Hamilton's social crisis.

31 August 1999

The government does not have parliamentary support for its latest tax cut bill and abandons trying to get it passed prior to this year's election.

State Services Commissioner Michael Wintringham is criticised by acting State Services Minister Maurice Williamson for not keeping the minister's office provided with details regarding the $410,000 - $419,000 salary of Lotteries Commission chief executive David Bale. Williamson issues a template providing realistic salary package guidelines to the chairs of all Crown entities.

Westport doctor Ken Mills says he has been threatened with death and three times has called police for protection against irate people because he would not approve sickness benefits. He says sickness beneficiaries most often claim for mental health or drug and alcohol problems and while most deserve their benefits, there are some who obviously did not.

Job losses are in the pipeline at Clear Communications. With a new owner, British Telecom, and a posted loss of $1m last year, Clear will cut 150 staff. Clear currently employees 900 people in NZ, about 700 of these work in Auckland.

The prisoner work scheme needs reviewing according to the Council of Trade Unions. CTU president Ken Douglas, a member of the Corrections Department Inmate Employment Steering Committee, says the scheme breaches the International Labour Organisation's conventions on forced labour, it undermines private sector commercial activities and is unduly exploitive of prison inmates. Ken Douglas says the scheme should utilise real work experience to involve inmates in structured skills development and training. He also says there needs to be a legal recognition of the employment relationship. The Trade Union Federation blew the whistle on the scheme and now the ILO has a committee investigating the scheme.

1 September 1999

Lotteries Commission chief executive David Bale resigns his $410,000-plus job.

Accident Compensation Commission subsidiary Catalyst Insurer Services will cut up to 150 jobs. The company was set up in July this year as part of the restructuring of ACC and currently employs 1,250 people in 44 offices. CIS is requiring fewer staff because of a drop in its workload attributed to changes in ACC policies that have resulted in fewer people being eligible for long-term claims.

2 September 1999

Women graduates earn substantially less than their male counterparts even though they out-perform men in every area of study, according to agricultural science professor Jacqueline Rowarth. She applauded the fact that the number of women doing science degrees has doubled over the last 25 years. But she points out that six months after completing their degrees, no matter what field a woman studied, she will be earning less than a man in the same industry. The disparity ranges from a difference of $228 per year in social science degrees to over $3,000 for engineers.

Alliance MP Liala Harre's Paid Parental Leave Bill fails in parliament by a vote of 58 _ 60. The Public Service Association national manager Wendy Kazianis says the failure of the Bill, after public opinion has been so firmly in favour of it, this will not be the end of paid parental leave. She says paid parental leave will become a special election issue.

Sheltered factories that provide employment for 1,000 British disabled people are to be closed. The British government is closing up to 18 Remploy sheltered workshops in favour of supported mainstream jobs. There is little support for the move by the disabled workers or their unions.

3 September 1999

Investment in jobs would be far better than putting a prison in the Far North, according to Ngapuhi kaumatua Graham Rankin. Rankin tells his district council he finds it distasteful that Far North mayor Yvonne Sharp went to Wellington to assure Corrections Minister Clem Simich that the Far North could provide the support services required for a regional prison. Rankin tells the council that 99% of those who went to prison are unemployed and that the emphasis should be on creating jobs, not prisons.

4 September 1999

Tourism is booming in NZ. The numbers of tourist rose 5.9% this year over last year, and per tourist spending increased 18%.

Police officers will no longer be required to retire at 55 years. A last change to the Police Act, being considered under urgency, is added by Act MP Patricia Schnauer and supported by both Labour and the Alliance.

5 September 1999

The Post Primary Teachers Association says that about 3% of its teachers will have quit by the end of the year. Association president Graeme Macann says that coupling this news with the ministry's recent announcement of a need for 6% more teachers for next year to accommodate the expected increase in student numbers, means there will be near to a 10% shortfall in secondary teachers come February. He says the extra stress of the staff shortages will drive even more teachers from the industry.

Hamilton state housing tenant Sue Hartley leaves her Housing NZ house after her long-time partial rent strike against market rates. Hartley continued to pay 25% of her income for her Housing NZ house for five years after the rental rates began to climb to market rates. Now, $16,000 behind in rent, she has accepted a cheaper one bedroom Housing NZ house but loses much of her accommodation supplement. She is negotiating with Housing NZ on how she will repay her debt.